Japanese Government Issues Guidelines Pertaining to Mergers and Acquisitions

The Japanese government issued new guidelines on Aug 31 to encourage more mergers and acquisitions (M&A) in the world's third-largest economy, with the goal of spurring industry consolidation and increasing competitiveness.

The guidelines establish a code of conduct for mergers and acquisitions, cracking down on some defence tactics and emphasising that credible takeover offers should not be rejected without due consideration.

The new rules have piqued the interest of global investors and strategic buyers who have grown tired of defensive tactics aimed at preventing takeovers and entrenching management.

The Ministry of Economy, Trade, and Industry (METI) received comments from 50 parties, including overseas funds, ahead of the publication, an unusually high number for such guidelines.

"Most of the comments were positive," said Tomoaki Nakanishi, director of METI's corporate system division.